India Shining or Flickering

Posted by Aneela Shahzad
on January 22, 2015

“Those who live this side of River Sindhu and who believe this land as their motherland and land of their ancestors-they all are Hindu”

The Standard and Poor’s, the Moody’s, the Dagong’s and the Fitch’s recent downgrading of India from the prospects of becoming the world leading economy in the near future to just a fairly stable one, with a gloomy and speculative stance on whether it’s economy has the potential to grow or not, has aroused quiet a scuffle in India’s prideful high-gentry. Morgan Stanley and Goldman Sachs have raised their doubts too, upon the country’s growth imperatives, which they think is constrained by the ‘lack of political will to implement reforms’.

The state of India holds 1.2 billion people, which is about one-sixth of the total world population and homes the largest number of poverty stricken people of the world. According to Oxford’s OPHDI study some 53% of Indians live in poverty and out of this 28% scrap in severe abjectness. The report says that 8 Indian states have more poor than 26 of the poorest African nations combined. The latest UNICEF data show that one in three malnourished children worldwide are found In India, whilst 42 percent of the nation’s children under five are underweight and 58 percent of children under five are stunted. The 2011 Global Hunger Index (GHI) Report places India amongst the three countries where the GHI between 1996 and 2011 went up from 22.9 to 23.7 i.e. hunger increased. In some Indian states, such as Madhya Pradesh, malnutrition levels are on par with Ethiopia or Chad, at 60 per cent or more. So when a recent study by Goldman Sachs says that, ‘projections suggest that India’s labour force may rise by 110 million by 2020’, one should reckon that most of this labour will be stunted, weak and unhappy.

The social paradigm of the country is also very complicated, the caste system, in spite of several reforms initiated by successive governments and the enactment of laws against caste discrimination, is strongly weaved in the society and cannot be extracted. Thousands of years of social and racial discrimination have rendered it the ethos of the Hindu mind to prejudice all interactions with a permanent bias. The politico-economic situation of the country cannot be construed ignoring social factors such as the permanent down casting of huge masses, so that they will never be able to rid themselves of the scourge of poverty and humiliation. It must be noted that the wide majority of the Dalits which comprise 16% of India’s population lives below poverty. It must also be realized that the 53% poor of the country are vulnerable to malnutrition, stunted growth, illiteracy and disease. In addition India faces a growing problem of gender discrimination, as women prostitution is protected under religion and religion allows women to be abused for the satisfaction of the male. In such conditions how was it possible for India to think itself as a prospect world power, let alone a democracy, in the first place?

Perhaps the peculiar Indian thinking is precisely the reason, in which the welfare of the down-cast is not to be taken as a measurable entity. So India qualifies the first condition to be a global economy; it has to be based on exploitation of unaware masses, and India does so in flying colours, as it is a part of their faith; it is part of the faith of the weak to submit humbly to the strong and elite. So faith and faithful politics renders it a holy practice to accumulate wealth in a concentrated minority of elite. But as it happens, blind faith does not take one a long way, though it might create superfluous, temporary glittering in the eye. That is the cause of the boom in the Indian economy; its mere flickering is being taken by the world as a glow.

So how does India shine? How did it receive the ‘hype’ from the global community, in the recent years, which has been portraying it as the near economic giant perhaps parallel to China and a contending regional power. Here are some explanations to the real situation:

a) False portrayal of figures

In Poverty -whereas the World Bank defines poverty as ‘survival on less than $1.25 per day’, the Indian government has been measuring its survival in terms of the cost of nutritional food required by a male adult to sustain the human body, which they set as 2,400 calories a day in rural areas and 2,100 in urban areas which makes it equals to about $0.53 per day. The Indian government simply neglects to see the real-time opportunity that this man has to obtain a food with the given nutritional value in this money, moreover does this government think that this amount of food is all its people need to get rich, do they not require clothing, shelter, education, security etc. which are deemed as basic human rights. Therefore when India says its poverty has gone down to 37% or so, it is by using such tools.

In Growth – While GDP does tell us what a country has produced in a certain year but it cannot be taken as the amount of well-being of the people of that country unless some other critical values are taken into consideration with it. If a country has produced more it is also important to note if its population has risen in the same time; furthermore what benefit is this increased produce if the public cannot buy it, figures show a progressive increase in India’s inflation index, from 18 in 1975 to 42 in 1990, 100 in 2000, 121 in 2005 and 126 in 2010. Moreover the per capita income has shown a steady decline, from 2.18 to 1.56 to 1.26 to 1.64 and 2.01 in the same years. The real analysis is that if the GDP has increased and the people have become poorer then this is an indicator of the fact that the produce is being exported for currency and the currency is not being returned in the economy OR economy is being circulated in small select sectors while the vast majority is being kept outcast from its fruits. Another important thing to understand is that the per capita income is an average value for the whole country, considering the wide economic disparity in India, one can easily reckon how much of the 2.01 PCI is reaching the 53% poor of the country and how much of it goes to the top. So when Swiss private banking group Julius Baer projected India’s HNI population (high net-worth individuals) to more than double to 4,03,000 by 2015, it gives us a fair idea of what is happening in India. Moreover the CreditSuisse global wealth report 2011, shows a comparision between China and India, that says that China has a bulk population in its middle class while India has that bulk in its lower class. And the Forbes magazine said in an oct. 2010 edition that ‘The top 100 richest Indians owned the equivalent wealth of the top 400 richest Chinese in mainland.’

b) Foreign Investment

In the two decades after 1990, India moved from internal, planned, restrictive government policies under socialist ideals to a policy based on globalization and privatization, attracting foreign investment. Hence India’s borders were opened for the free market; the FII’s (foreign institutional investment) and the FDI’s (foreign direct investment) from global giants were allowed to set up industry here and sell out Indian produce for a better price round the globe; this would initiate the government to fill in the gap by buying in cheaper products for the country, which would surely fill the pockets of the two parties bursting but would kill the growth of the country forcing previous producers of food and raw material to flock around city centers in search of service jobs. We all know that the foreigner comes to our country only for cheap labour and cheap raw material; they come here to be free from strict labour laws enact in their homelands and they take the bulk of their profits back home. But the investors are happy with you and would favour a positive rating for you by all means. The FII’s and the FDI’s were given maximum inflow, for example with a 100% FDI in the construction business, with no share of the government in the processing neither any in the revenue. The assets of huge private companies like Tata that have risen from some 85billion in 1991 to some 522billion in 2012, is an example of a foreign venture that makes their products cheap here and not only grabs the local market but sell their cheap build to their other buyers in the globe, likewise the ability to produce small cars at prices far lower than in Korea helped Hyundai Motor India’s Chennai plant become Hyundai Motor’s global hub for its Santro and Maruti Suzuki has established itself as a cost effective car producer and is exporting products like Alto and Swift to Europe and other world markets.

c) IT boom

When China had entered the global market much before India, manufacture was the demand of the day then; but when India was ready to open its doors to globalization, outsourcing of soft services was the booming trend; with lack of infrastructure in the country and a bulk of unemployed youth educated with English as their second language, India made a plunge for the IT market. Though it did employ a dazzling workforce of 3million, but again it must be taken into account that work has been outsourced to India for its cheap labour, in fact one of the cheapest educated labour in the world. The Indian economy depends on IT for 40% of its GDP, an economy depending on IT outsourcing cannot be considered as a stable one; as it fluctuated adversely with the global financial crisis originating from Europe and the US, and has led to shaph down-sizing of its foreign emplyees and an increase of work-hours for the remaining fortunate. China and Phillipines also threaten the IT boom of India as the pose as strong global contenders in the coming years.

d) Agriculture

Although about 60 percent of the workforce in India is engaged in agriculture and allied sectors like forestry, logging and fishing, it yields only about 15.7% of the GDP. After the 90’s, the extensive use of HYV seeds, pesticides and chemical fertilizers had already left much of the land degraded, but the reach of the global investors in India further devastates the situation by an almost wholesale integration of and interdependence between industry, financial service and agriculture. The agricultural production has now become a predominantly pre-capitalist commodity production, with a tendency towards being a full commodity production, if the global retail and food giants are given the vantage points they are aspiring for right now, to grab the retail market of India and convert it into the Walmarting phenomenon. Which is a phenomenon that kills jobs, destroys small-scale businesses and forces the farms to sell at the cheapest rates owing to the hegemony of the retail giant on the market.

e) Compliance with the global community

As political maneuvering went on in the cold war era, on the global chessboard, India found itself in an increasingly favourable position to becoming a knight defending the US interest; showing strength where the Superpower is weak and needy. Forgetting that the US interest is an extremely unpredictable and volatile thing, it went on to eat the fruit of the ‘forbidden tree’. So as long as India would utter the words fed to it by its mentor and allow its land and resources to be used by the US, at will, for the greater benefit of humanity of course, India would be getting the ‘hype’ it hadn’t dreamed of before. The US continues to support India with its global network of economic terror and its media machine to portray India as one of the most decent and promising country of the world. A strong India is being depicted as insurance of global peace and global economic stability and what not; and Gandhi jee is being portrayed as the prophet of the 20th century. Therefore most of India’s shine comes from global reflectors of artificial false light. For as the western powers plan to use India’s resourses to their benefit and prop India as a military strength that would counter balance all other potentials in the East, India is given increasing role as an intruder into the politics of its neighbours physically as well as diplomatically; India is not giving consideration to the fact that it is just being used as a disposable option for as long as it will serve.

f) Blindfold to internal conditions

As the Indians pretend to be at the top of the world, the land is being snatched away from right under their feet, the Naxalite-Maoists, who are demanding a separate state, penetrate the Red-Corridor, which takes about one-third of India; the TRS demanding the separate Telangana state; the ADR demanding a separate Teola state; the AHCHMA and ULSA demanding Assam and Bodoland as separate homeland. Furthermore strong separatist movements for Manipur, Mizoram, Nagaland and Khalistan(Punjab). The fire of separation is practically engulfing half of India, border to border while it stubbornly calls itself a democracy. The elite-Brahaman thinking of the Indians, forces them to conserve their riches at the centers, converting the vast lands of India into a world of forsaken, wretched humanity prone to outlaw and rebellion. The Home Ministry has given a list of 35 terrorist organization, that they claim are not home-grown but have poured in from all borders; because the government is not ready to ensure the welfare of the vast majority or provide them security, all it is left with is the blame-game. USCIRF has placed India on CPC (Countries of Particular Concern) and watch list in year 2001, 2002, 2003, 2004, 2009 and 2010 primarily because of communal riots between Hindus and Muslims in Gujarat & Mumbai, Kandha-Tribals and Panna-Christians in Orissa, and Anti-Sikh riots in Delhi. In such conditions to think of India as a ensurer of peace and stability in the region can be graded as nothing less than a blatant lie.

Conclusion - In the past two decades, India has also been a gravity point of Aid and IMF and World Bank loans. At the onset of technological advancement in India, when global investments in the country enabled products to come out in bulk, following the western model, the Indian government was made to lower interest rates and to provide cheap loans for the purchase of consumer durables, automobiles and houses etc. This measure saves the big industries from collapsing by creating false demand and indebts the people, snatching away what they earned in the technological/IT boom in the purchase of artificially created necessities. India faces the typical 3rd world dilemma; it has massive induced liquidity but lacks the will or courage or ability to covert that money into a self-sufficient, healthy and robust economy, all it does with its money is non-development expenditures, at the best. Though this has added to the size of the market but has also added to the size of the budget deficit year after year. India’s public debt is 67.57% of its GDP (IMF survey), whereas China’s is 22.03%. So India is probably in a high speed whirlpool right now, which is really exciting, but by the time India is through it, it will be left devastated and collapsed in an irreversible manner.

If wealth is concentrated in a very few hands, you don’t call yourself a prosperous country, you call yourself vulnerable. If India were to really become a power of any global effect, which is plausible by the mere momentum it holds, it had to follow only the nature’s path. What it had to do was emphasize the most on its agriculture, not by hybrid technology but by natural ways, whatever little it had, it should have put back into its farmlands, small-scale subsistence farming could be the country’s backbone; a happy and healthy farm and its farmer would ensure that India could feed itself and even have surplus, that would be a simple step to pull the nation above poverty and discourage sqattering around the cities. Secondly, India should have not have harboured the dream of a ‘greater India’, when already it is unmanagablly vast; this false dream has rendered all its neighbour as its enemies, India infiltrates in them and they retaliate in different ways, only if India were to be self-composed and had concentrated in its own people, it would be safer from internal and external dangers. Kashmir, Bangladesh, Srilanka, Nepal, Burma, Pakistan and now Afghanistan, where has India not intruded, with hegemonic designs; all this results in a more unstable India, with unsatisfied masses bound to turn against their own government and neighbours who would be happier to see this big elephant die its own death, as it has caused nuisances for everyone all around. If India was to become a regional power, that would only be possible if there was a positive vote for India in the neighbourhood, but if it is in a habit of skirmishing with everyone, it is always in a state of war; how can there be a regional power if there is no regional stability.

Although India portrays to be heartbroken on its recent downgrade from a projected 8% to a 6%, one must keep in mind that the Ficth rating has nothing to do with the economy or well-being of the real Indian people. Credit rating agencies assess the likelihood that a government or company will pay its bond obligations or would default. They use undefined tools and their own judgment and experience in determining what public and private information should be considered in giving a rating to a particular company or government and provide a guideline to global investors for the prospect future. Therefore giant global investors, both private and institutional, who fund such companies may dictate the outcome of such reports so that they can put pressure on the target country to comply with their policies. So wherever you read the outcome of these reports you will find comments like these with them:

India’s economy is ‘constrained as it is owing to an acute lack of political will to implement reforms’ (Morgan Stanley and Goldman Sach);

‘India is confronted with structural challenges surrounding its investment climate in the form of corruption and inadequate economic reforms’ (Fitch);

‘India’s medium to long-term growth potential will gradually deteriorate if further structural reforms are not hastened, including measures to enhance the effectiveness of the government and create a more positive operational environment for business and private investments’ (Fitch); ‘… major projects currently suffering because of lack of some clearances should take off…’ (Brinda Jagirdar, chief economist, State Bank of India).

All these comments clearly show that these reports are meant to intimidate India to open its borders further for global investors to exploit and squander India’s resources at will and to irreversible limits. So in both ways; whether India hits a higher rating or not in the near future, it does not shine. It merely flickers, as the giant prepares its own ‘arthi’ as a sacrifice for its false self-glorification and wishful thinking that the capitalist/imperialist embrace will leave it profited by any means.

India faces the typical 3rd world dilemma; it has massive induced liquidity but lacks the will or courage or ability to convert that money into a self-sufficient, healthy and robust economy, all it does with its money is non-development expenditures, at the best.